net worth and capital employed

Capital employed means capital that is employed (infused) in the business to run the business.

Reserves being profits of the company are used for running the operation of the business. Operations may be long tern or short term.so ALL the long term liabilities for the COMPANY shall form part of capital employed. Promotorers are source for capital infusion into the business.

Net worth is totally a different concept. Net worth of the COMPANY means net asset of the company which can be arrived at only after deducting  current liabilities i

Capital employed of a business is from the ordinary shareholders and from long term liabilities. Hence, it is the effective amount of money actually being used in a business, regardless of whether it is from the owners or creditor or banks.

For understanding purpsoe you can  say  what

Net asset: Toatl asset minus current liabilities

Total asset minus current liab = long term liab (incl shareholders fund)=capital employed

Net worth: Shareholders fiunds+reserves

Capital employed= Net worth+llong term funds (liab)